If you are a trucker and haven’t spoken to cargo insurance companies, now is the time to do so. Trucks are responsible for transporting a lot of very expensive materials and items across the nation every day.

According to American Trucking Associations, over 10 billion tons of freight were moved by trucks across the United States in 2017. To put it into perspective, that amounts to around 30 pounds of goods for every adult and child in the country.

Trucks are responsible for moving over 70% of all goods transported across the U.S.

The value of each load hauled varies greatly, but it’s easy to see that the cost can get very high very quickly. Even if an individual item isn’t expensive, the total value can be high due to the quantity being carried.

Every trucking business should know whether they need to contact cargo insurance companies before they start working with clients.

Do I Legally Need Coverage from Cargo Insurance Companies?

The minimum amount of insurance legally required for truckers is called carrier liability. This level of coverage will keep you legal, but it will likely not provide complete financial protection if you lose your cargo. These policies typically cover up to a certain amount, which is usually less than the total value of the goods you are shipping.

It also has other limitations. You may not receive compensation for cargo lost due to anything that is labeled an act of God, like a natural disaster, or an act of war. It also won’t pay for goods that are damaged or lost due to poor or inadequate packaging.

Even if it does pay something towards lost cargo, it will likely leave you with a big gap that your business may have to cover.

While you can stick to the minimum coverage required, it is not recommended. Cargo insurance companies offer better protection in case something unexpected happens. You may not be breaking the law without it, but you could seriously harm your business if expensive cargo is lost or damaged in an accident.

What Can Cargo Insurance Companies Do for You?

Cargo insurance companies provide another layer of protection in case you lose or damage freight. It will reduce the losses taken by your business in case of an accident or incident. It also offers better flexibility in what it will cover.

For example, cargo insurance companies will pay out if goods are damaged due to an act of God. Most policies will pay a claim as long as the damage wasn’t your fault. Even if you haven’t had an accident, cargo insurance will help you keep peace of mind every time you or one of your drivers gets behind the wheel.

Do I Need an All Risk or Named Perils Cargo Insurance Policy?

The cargo insurance companies you talk to will likely offer two types of coverage. These vary in cost with different limitations, so make sure you know what you are getting. Don’t make a decision based on insurance rates alone.

  • All Risk Cargo Insurance

This one is called “all risk” because it covers just about anything. This policy will pay claims any time you experience loss or damages due to external forces. That can include customs rejection, negligence, abandonment, natural cargo defaults, and other situations. 

This is a good choice for businesses that haul high-value or fragile items. It reduces your financial risk significantly. The only downside is that cargo insurance companies charge more for this type of policy.

  • Named Perils Cargo Insurance

The difference between all risk and named perils cargo insurance has to do with what is covered. Named perils coverage is limited and will only pay out in certain situations. These circumstances will be outlined in the policy. As long as the cause matches what is stated in the policy, you are covered. 

This option gives trucking companies a way to select coverage in an al la carte fashion. You can add as many things as you like, and the cost will reflect what you want to cover. The benefit is that you won’t pay as much for the policy. The less that is covered, the less you have to pay. The downside is that you could face a situation not protected by your policy and wind up having to pay out of pocket for it despite having insurance.

Speaking to cargo insurance companies will help you determine which type of coverage is best for you.

Do I Need Cargo Insurance Coverage?

Cargo insurance is optional, so you technically don’t have to have it. Choosing to skip it will expose you to enormous financial risks. Trucking businesses rely on having a steady stream of goods to transport. If your clients aren’t happy, this will hurt your business. And they won’t be happy if their cargo is missing, damaged, or late with no compensation. 

Carrier liability will pay for some things, but it is very limited and most likely will leave you with some financial burden afterward.

Anything can happen when you’re out on the road. If you aren’t sure if you need cargo insurance, ask yourself if you or your business can handle the cost of losing all of the freight you transport in a shipment and still be profitable. If not, then you need coverage.

If you are looking for cargo insurance companies, contact Insure Trucking. We’re here to discuss your needs and help you find affordable insurance that will protect you and your business.